This article first appeared in The Edge Malaysia Weekly on May 11, 2026 - May 17, 2026

FGV Dairy Farm Sdn Bhd, which produces dairy products under the Bright Cow brand, has shuttered its business in Linggi, Negeri Sembilan, and its assets have been put up for auction.

The company is a 60% subsidiary of FGV Holdings Bhd, which was delisted from Bursa Malaysia last August, and 40%-owned by RedAgri Farm Sdn Bhd.

“The assets and buildings are being auctioned off by Agrobank, which they took loans from,” says a source.

A company search shows that FGV Dairy Farm has bank charges of RM18.7 million from Bank Pertanian Malaysia Bhd (Agrobank) that remain outstanding.

Sources say FGV may have invested about RM30 million in the business but faced multiple operational challenges over the years.

“They had issues with farm operations, as they lacked experience in managing them. Of the livestock brought in — about 300 cows — around a third died from disease. They also faced logistical challenges, including cold chain management, while retail costs at supermarkets added further pressure,” says the source.

Slightly over five years into the venture, FGV appears to have called it quits, with its dairy farm in Linggi shutting down. The company did not respond to queries from The Edge at the time of writing. Its filings with the Companies Commission of Malaysia (SSM) show that FGV Dairy Farm has been struggling to turn a profit since FGV Holdings Bhd acquired a 60% stake in RedAgri Farm, operator of the dairy business, in 2020 for RM10 million.

The dairy farm was already loss-making before FGV’s entry into the venture. FGV Dairy Farm’s net loss rose from RM2.33 million in FY2020 ended Dec 31 to RM3.77 million in FY2021, before peaking at RM9.62 million in FY2022 because of a significant impairment of assets, and then narrowing to RM1.98 million in FY2023.

Its net losses were consistently higher than revenue, which fluctuated over the period, rising from RM833,095 in FY2020 to RM2.38 million in FY2021, before falling to RM1.92 million in FY2022 and RM1.67 million in FY2023.

According to its latest publicly available financial statements, FGV Dairy Farm recorded a net loss of RM2 million against revenue of RM1.38 million in FY2024. It also reported accumulated losses of RM32 million on its balance sheet.

It is worth noting that in its FY2022 financial statements, FGV Dairy Farm fully impaired its cattle barns, farm infrastructure, and feeding and milking equipment amounting to RM7 million, after it ceased to acquire new livestock because of continued losses.

FGV’s FY2023 annual report stated that the dairy farm had expanded its contract farming programme by engaging farmers to supply fresh milk to its Linggi facility.

“They had to get fresh milk from other sources because a third of their cows died and they were not buying new livestock,” says the second source.

People familiar with the industry say dairy operations require scale, and a herd of 300 cattle is insufficient to achieve commercial viability.

For comparison, Farm Fresh Bhd’s (KL:FFB) latest dairy farm in Taiping, Perak, which began operations in 2021, has a capacity of 4,000 dairy cows and 800 acres. The Taiping facility is a full-scale dairy operation integrated with an on-site milk processing plant.

FGV Dairy Farm’s balance sheet also saw borrowings rise between 2020 and 2024.

Total borrowings as at end-2020 — consisting of term loans secured against property, plant and equipment — stood at RM13.42 million. By end-2021, borrowings had increased to RM17.89 million before declining to RM12.09 million in 2023. Total borrowings stood at RM15.5 million in 2023 and comprised RM11.37 million in term loans and RM4.15 million in unsecured revolving credit.

By end-2024, borrowings had risen further to RM16.29 million, pushing FGV Dairy Farm’s gearing to 164%.

The shuttering of FGV Dairy Farm’s operations in Linggi would not be FGV’s first dairy farming venture to fall through. In December 2024, it announced that it was calling off its plan to develop an integrated dairy farm business in Chuping, Perlis.

The investment, which would have cost up to RM4.5 billion and involved 10,000 cows, did not take off, following the termination of a conditional shareholder agreement between its wholly-owned unit FGV Integrated Farming Holdings Sdn Bhd, Qatar-based Baladna for Trading and Investment WLL as well as Touch Group Holdings Sdn Bhd, FGV said.

In a stock exchange filing, FGV said the agreement was called off after the “expiration of the period to satisfy the conditions precedent stipulated”. It did not disclose the specific conditions that were unmet.

FGV had earlier planned for the dairy operation to become commercially viable by 2025, targeting production of 100 million litres of fresh milk annually within the first three years.

The proposal was part of the country’s plan to address national food security concerns by reducing reliance on imported milk and dairy products.

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